Mexico's fledgling startups: Facebook-sized ambitions

Mon Sep 17, 2012 1:45pm EDT
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By Gabriel Stargardter

MEXICO CITY (Reuters) - In a mosquito-ridden hall in downtown Mexico City, hundreds of wannabe Mark Zuckerbergs gather to build the Latin American giant's newest industry, one app at a time.

"Hola, geeks!" says a U.S. speaker, addressing Mexico's future tech entrepreneurs at a recent 48-hour "hackathon," a networking event masquerading as an app-building contest.

Despite its proximity to the United States, Mexico is a relative late-comer to the Internet startup party. With only a handful of operating companies, the country still lags well behind regional leaders Chile, Argentina and Brazil, where government subsidies stoke dynamic local scenes.

But with a huge domestic market, surging connectivity, a stable, growing economy and a new, reform-minded government set to take the reins in December, that might be about to change.

"There's a big opportunity sitting on the table," said Doug Renert, a U.S. investor and invited speaker here who runs TandemCap, a mobile startup accelerator fund based near Silicon Valley. "There's a lot of money here."

"Within ten years, the industry could be worth 50 to 70 billion dollars," said Cesar Salazar, a managing partner at Mexican startup venture capital firm Mexican.VC, which was recently bought by 500 Startups, a U.S. accelerator fund.

Entrepreneurs say funding was hard to come by in previous years, but there are now incubators that finance startups, a handful of venture capital firms and a recently established $23 million government seed fund.

And among the iPad-wielding youngsters at the hackathon, who had 48 hours to build a mobile app that tackled Mexico City's pollution, traffic and public transport problems, the mood was decidedly upbeat.   Continued...